It’s the Revenue, Stupid by Julia Ingalls

When I think about marijuana, I think about district attorney Steve Cooley. Bongs, inner clarity, and cancer patients simply don’t exert the same visceral pull as the man who wants to be the next state attorney general. Steve Cooley is my personal figurehead of dope.

The D.A. grants few interviews, but his positions are well known. Over the past year, the Los Angeles City Council has drafted several proposals to attempt to regulate the 137 medical marijuana dispensaries operating with permits in the city of Los Angeles. On each occasion, the D.A. has said that he will prosecute those who attempt to sell marijuana. Compromises, addendums, even thousand-foot proximity limits from schools do not soften his political stance. Apparently, Mr. Cooley thinks of voter intent as more of a survey.
But what a survey. According to a Gallup poll, 54% of Americans in the west supporting legalization. With dispensaries facing a variety of perplexing legal issues, it may be simpler to just outright legalize it. As of January 2010, there is a bill in the state assembly to legalize marijuana and place a $50 tax on each ounce sold. People familiar with addition and multiplication vouch for the economic feasibility of the plan, and the subsequent financial boon to the state.
So what is the dark side?
Many people in law enforcement feel that medical marijuana dispensaries are perfect fronts for crime/terrorist organizations. Oddly enough, fronts are not exclusive to drug operations. Perfectly legitimate businesses can set themselves up as fronts for lazy retired crime families. An otherwise pleasant seeming coffee shop on the West Side of Los Angeles was, for years, run by an unscrupulous Asian crime family with very insecure hairnets. And was the coffee remarkable? No.
Then there’s the problem of setting up a board to regulate medical marijuana. Where does the money come from to appoint a board who will watch over the dispensaries? What about malpractice insurance? How will the law be written, if everyone is far too stoned to do it?
The state assembly has a much better plan. Legalizing marijuana without classifying it as a medical substance will eliminate thorny bureaucratic issues, close doors to Evildoers (who are currently battling to be recognized as a separate entity from jazz fusion band the EvildoneIts) and boost revenue.
Or will it?

Revenue: the law, and the growers

“You gotta look at how the government works,” Jeff Joseph, the owner of the dispensary Organica, explains. He’s been running Organica since 2007. The majority of his clientele are card-carrying cancer patients. As a State Board of Equalization tax-paying business owner, he has a sharp grasp of revenue, and the keen understanding of human nature that anyone dealing with the public on a regular basis must possess.
“[The government] has two different aspects. They have taxation, but they also have law enforcement. The laws that they’re enforcing, that’s their business. Their business is not law changing. That’s our job. The law makers want to represent their constituents. But until the constituents’ voice is loud enough, they don’t really want to do anything. It’s a hot potato. Law enforcement is going to interpret the law to benefit them. Everybody’s going to interpret the law to benefit them, whoever’s interpreting.”
When asked about the potential revenue provided to the government by taxation, Jeff says, “Let’s look at this way.
“They already have a revenue basis. The people who are able to actually enforce the law already have the revenue base. They look at the tax as a threat to the revenue base.”
But this fear about a threat to the revenue base is not purely on the side of the law. If legalization were to become a reality, how would large-scale marijuana growers feel about taxation?
It should be noted that interviewing large scale growers is a bit like using carrier pigeons; it doesn’t seem like it’s going to work, but it does, somehow. As it happens, large-scale growers in California are pro-legalization. They foresee that if marijuana is legalized, large-scale corporations will take over, and a “King of Beers” situation will result, turning homegrown growers into the equivalent of microbreweries, whose high-end product will attract the discerning buyers.
Since the first wave of dispensaries opened, these large-scale growers have witnessed an increase in their sales. In some places, such as Humboldt county, growers feel that legalization would “bring legitimacy to a very old industry.”
But taxation does not necessarily excite them. Much like law enforcement, they are somewhat reluctant to part with a revenue stream that is working for them, in favor of an untested method.
So what is the solution?
As Jeff says, “[The law is] enforcing the statues that are there. We get the other side saying, well, people voted for this, we want to see this happen. You got a conflict of interest. People need to make a clear law. That’ll be the first thing.”

Lawsuits and fees

Before a clear law can be made, however, it’s much better to start suing people. At least, as of March 2010, this seems to be the solution of city attorney Carmen Trutanich, who filed a lawsuit against Organica, among others, to prevent over-the-counter sales of marijuana.
But not to worry. Public advocacy group Americans for Safe Access filed a counter-lawsuit against the city on behalf of the dispensaries.
The lawsuits were prompted by the February 3rd signing of a city council bill limiting the number of dispensaries to 70. The law hasn’t quite taken effect, as its passage hinges on the city approving the fees that the dispensaries will pay to remain in operation.
It’s the revenue, stupid.